Two leading businesses in the legal hemp industry, IHC Investments, Inc., and Bluestar Operations, LLC, have filed separate Petitions for Review of Final Agency Action against the Drug Enforcement Administration (DEA) and its leadership. These coordinated legal challenges, filed in the U.S. Court of Appeals for the Ninth Circuit and the Fourth Circuit, contest the DEA’s final rule published on May 4, 2026, which classifies hemp-derived Hexahydrocannabinol (HHC) as a Schedule I controlled substance. David Sergi of San Marcos, TX, is lead counsel for IHC Investments, and J. Gregory Troutman of Louisville, KY, is lead counsel for Bluestar Operations.
An online media briefing about both cases will be held on Tuesday, June 2, 2026, at 2 pm CDT. To register for the Zoom press conference, please follow this link: https://us02web.zoom.us/webinar/register/WN_zb3i47gvRQu3v0oFScVoAg
The simultaneous lawsuits argue that the DEA’s action is an unlawful administrative overreach that undermines the protections and market stability established by the 2018 Farm Bill.
Direct Conflict with the 2018 Farm Bill
The core of both legal challenges rests on the clear, expansive definition of “hemp ” outlined in the Agriculture Improvement Act of 2018 (the “2018 Farm Bill”). The petitioners assert that:
- The 2018 Farm Bill explicitly removed hemp and all of its “derivatives, extracts, cannabinoids, and isomers” with a delta-9 THC concentration of not more than 0.3 percent from the Controlled Substances Act (CSA).
- Hemp-derived HHC is a protected hemp derivative, and the DEA’s interpretation unlawfully inserts restrictions Congress neither intended nor enacted.1
- The DEA’s attempt to label commercially produced HHC as “synthetic THC” conflicts with the plain text, structure, and purpose of the 2018 Farm Bill.1
Reinforcing the Challenge with Federal Precedent
The lawsuit filed by Bluestar Operations, LLC, in the Fourth Circuit highlights that the DEA cannot displace Congress’s hemp definition through an agency interpretation. The petition cites the Fourth Circuit’s own precedent in Anderson v. Diamondback Investment Group, LLC, arguing that the legality of hemp-derived cannabinoid products turns on compliance with the Farm Bill’s delta-9 THC threshold, not on agency interpretations that criminalize cannabinoids merely because they undergo post-harvest processing or conversion.
Invoking the Major Questions Doctrine
Both petitions stress that the DEA’s rule violates the “Major Questions Doctrine,” a legal principle that requires clear congressional authorization for agency action on issues of vast “economic and political significance”.
The filings contend that:
- The regulation of the multi-billion-dollar hemp and cannabinoid industry is a matter of significant economic importance, and the DEA lacks clear congressional authorization to criminalize broad categories of hemp derivatives unilaterally.
- The Challenged Action threatens substantial criminal and economic consequences for manufacturers, retailers, and consumers operating lawfully across the country.
Impact on the Industry
“This is a coordinated defense of the rule of law and the stability of the American hemp industry,” said Sergi. “The DEA is attempting to redefine federal law through administrative fiat, causing immediate and irreparable harm to businesses operating in reliance upon the 2018 Farm Bill. These lawsuits in two different circuits demonstrate that the threat from the DEA’s unlawful overreach is national in scope.”
